Price Action Trading

In the price action trading model, all strategies deal with the price movement in the market without using indicators or having to make complex analyses. Traders use direct price charts so as to be able to identify patterns and trends in them while making decisions based on that information. This method is founded on the assumption that all information contained in the market is already reflected in the price movements, hence a very pure technical analysis strategy. The primary basic elements of price action trading are support and resistance levels, candlestick patterns, and trendlines. Traders usually examine the price in reversal, breakouts, or consolidation conditions to establish an entry or exit. Among those commonly used patterns is the "pin bar" or "inside bar," both of which suggest trades. This is another very easy yet effective technique popular among professional forex traders. It helps in gaining intuitive and responsive insight into the whole move.